CPS names two firms in mega-solar project

PublishedJune 25, 2012

January 11, 2012

By Tracy Idell Hamilton
San Antonio Express-News

Mayor says jobs to average $47,000.

County Commissioner Tommy Adkisson (right) leans toward Bill Sinkin, who founded Solar San Antonio,
as OCI Solar Power and Nexolon are presented as the choices to bring a solar power plant to
San Antonio. Photo: TOM REEL, SAN ANTONIO EXPRESS-NEWS / SA

Under a bright winter sun Wednesday, CPS Energy CEO Doyle Beneby introduced the companies selected to build one of the country’s largest solar projects and a solar manufacturing plant in San Antonio, an investment of more than $100 million.

OCI Solar Power, whose parent is a South Korean chemical company, will build the solar farms using panels from a factory to be built here by Nexolon, another South Korean firm with close ties to OCI and a builder of solar cell components.

Both companies will open headquarters in San Antonio, part of their larger commitment to bring at least 800 jobs to town with a $38 million to $40 million payroll.

Mayor Julián Castro said at a news conference that the average pay would be $47,000.

That does not include the temporary construction jobs that will be created to build the multiple solar farms, most of which will be in CPS Energy’s service territory.

Together, they will generate 400 megawatts of zero-emission electricity — enough to power 80,000 homes.

Some of the plants could be located in West Texas, Beneby said. CPS will buy the power from the plants for 25 years.

He would not reveal the price CPS will pay for the power.

He said the "all-in" price "is certainly among the most competitively-priced solar projects in the country."

CPS currently pays 15-16 cents per kilowatt hour for the 14 megawatts of solar power it currently buys; sources have said this deal is as much as 30 percent less than that.

Beneby said throughout CPS’ competitive process to select a solar company, OCI stood out "for the clarity of what they were offering." He called Wednesday "a landmark day" for San Antonio.

Kirk Milling, board chairman of OCI Solar Power, said the project will be "the cornerstone of our emerging green business in North America." As part of the headquarters move, he said roughly 80 executives and engineers will relocate to San Antonio from Atlanta.

Castro described the solar generation and development project as the successful nexus of job creation and environmental stewardship, dovetailing with CPS’ long-term plans and his SA2020 vision for the city’s future.

"It makes sense for ratepayers and San Antonio to go green," he said, "and get green invested in San Antonio."

The project, he said, will offer job opportunities across the spectrum, from entry-level work up to high-end technical jobs.

OCI has more than three dozen solar farms, between 2 and 20 megawatts in size, in different stages of development across the country, mainly in the Northeast. Together they total 350 megawatts, Milling said. It plans to "flip the switch" on its first, a 3 megawatt plant in Vineland, N.J, on Monday.

San Antonio will be the site of Nexolon’s first manufacturing plant in the U.S., and the first time it has partnered with OCI.

Nexolon went public last year on the Korea Exchange, according to Bloomberg News, hoping to raise as much as $191 million to expand its capacity.

Its founder and chairman, Woo Jeong Lee, said he is confident the U.S. solar market will continue to grow.

"Today’s commitment is only the beginning," he said at the news conference.

His father is Soo Young Lee, chairman of OCI Co. Ltd.

OCI Co., which owns OCI Solar Power, is one of the world’s largest producers of polysilicon, used to make solar cell components. OCI Co. bought a U.S. company that develops renewable energy projects last year; it became OCI Solar Power.

San Antonio will become OCI Solar’s "epicenter going forward," said Milling, as it seeks to expand operations across the country.

But he and Beneby were able to offer few concrete details beyond the level of investment OCI and Nexolon will make.

"We still have a lot of specifics to iron out," Beneby said, before a contract can be signed, which he estimated could take three months.

Those specifics include what, exactly, the new manufacturing plant would do, such as constructing components or assembling panels, when construction might begin or where the solar farms would be located.

He did say the partners have had discussions about making sure there are opportunities for local engineering and construction firms to get involved.

Castro said that the city of San Antonio has not offered OCI or Nexolon any incentives to relocate here, but Beneby said the utility is committed to helping the companies pursue incentives or subsidies at the the state and federal levels.

Mario Hernandez, executive director of the Economic Development Foundation, called the jobs and capital investment announcement "huge" for San Antonio.

"It will have a high multiplier effect," he said, creating three to five times more jobs than the 800 with the companies.Having two headquarters here is also important, he said.

"Then we have the ear of decision makers for future growth."

He and Richard Perez, president of the Greater San Antonio Chamber of Commerce, also noted that because the project is unique and high-profile, it will attract a lot of attention.

"This puts us on the map again, and firmly, as a center for green technology," said Perez.

Tom "Smitty" Smith of Public Citizen praised the environmental aspects of the project.

Solar power is drought-proof, he noted, and could also reduce the cost of peak power — the sun shines brightest in the late afternoon, when demand, and therefore costs, are highest.

Decreased air pollution is another plus, he said, calling on other cities to follow San Antonio’s lead.

"San Antonio is now leading the state and, in many ways, the nation in aggressively reducing carbon emissions and other pollutants by substituting solar for coal."

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